“If it is good enough for Iceland to do it,” Nigel Farage remarked in the first of his two televised debates with Nick Clegg, “I’m damned certain the British with 64 million can do even better.” The Ukip leader was referring to a free trade agreement that the Icelandic government signed with China in April 2013, despite the tiny Nordic country not being a member of the EU. Is this what proud British Euroscepticism has been reduced to – comparisons with Iceland? Together with Norway (population: five million) and Liechtenstein (population: 36,000) – those two powerhouses of the global economy – Iceland (population: 326,000) is a member of the snazzily named European Economic Area. The EEA is, in essence, the faux-EU, the geopolitical equivalent of a knock-off Gucci handbag. Rather than having all of the pros of EU membership with none of the cons – as some British Eurosceptics disingenuously suggest – EEA membership guarantees some of the pros and most of the cons.

Take Norway, often cited by the anti-EU brigade as a possible model for Britain. Despite being outside the EU, Norway has had to implement 75 per cent of its laws – 6,000 pieces of legislation. “We have been more compliant than many EU member countries,” the premier Erna Solberg, leader of the Conservative Party, has confessed. (In the 1990s, Norway was known as the “fax democracy”, with Brussels simply faxing new directives for the Norwegians to follow.)

It’s not a cheap deal, either. Norway’s total financial contribution to the EU each year is about €340m – which, per capita, works out to be slightly higher than the UK’s.

As for the “free movement” of workers that so upsets Tory backbenchers, the non-EU Norway, like the non-EU Iceland, is a signatory of the Schengen Agreement, which scrapped internal borders – unlike the UK, an EU member, which opted out. Is it any wonder that a government-commissioned report concluded in 2012 that Norway had seen “extensive Europeanisation” over the past two decades and that it was an “illusion” to believe it was outside of the EU?

Forget Norway, then. How about the wealthy, dynamic, free-market Switzerland (population: eight million), which arranges its own bilateral deals with all its trading partners, including the EU? The Swiss negotiate on an individual, case-by-case basis and are under no obligation to implement all of the EU’s internal market legislation. What’s not to like? Boris Johnson is so keen on the so-called Swiss model that he coined the term “Britzerland”.

But wait. First, Switzerland has a free trade agreement in goods with the EU but no agreement on services – including, astonishingly, on financial services. Remember that the UK accounts for a third of the EU’s wholesale finance industry. Want to try selling the Swiss option to the City of London now? No? I didn’t think so.

In 2009, the Swiss government ack­nowledged: “The existing [EU] barriers to market access place Switzerland at an economic disadvantage.” It added: “Switzerland loses out in terms of jobs, value creation and tax receipts.”

Second, whatever happened to no taxation without representation? Although it is outside the EU and outside the EEA, too, Switzerland contributes about €450m a year to the EU budget.

Third, Swiss sovereignty is overrated. The country relies on roughly 120 separate bilateral agreements with the EU and it is expected to adopt every single EU regulation in each of those areas – again, without any say on their shape, structure or content.

Eurosceptics harp on about the need for democracy. But the Swiss, like the Norwegians and the Icelanders, choose to eat food from a table at which they have no seat. They have no spots on the European Commission, no members of the European Parliament, no invitations to the Council of Ministers, no judges on the European Court of Justice. Yet, to varying degrees, they submit to EU legislation over which they have no votes, no vetoes and very little influence.

The simple truth is that whether the UK is inside the EU or out, we’ll have to follow EU rules and regulations. Eurosceptics say they like the EU’s single market but don’t like the EU’s regulations. What they seem unable – or unwilling – to understand is that there is no single market without regulations; it is the regulations that make it a single market, rather than a continent-wide free-for-all.

And it is the single market that gives EU member states power, clout and influence on a global scale. Do we want to negotiate with the Chinas and Russias of the world as part of a 28-member bloc of 500 million people? Or quit the biggest single market in human history in order to emulate Iceland, a country with a population smaller than Bristol? Eurosceptics bridle at being called “Little Englanders”. Yet their obsession with the likes of Norway, Iceland and Switzerland suggests the label may be an understatement. Tiny Englanders, perhaps?

The EU is far from perfect. It does need to change – to become less austerity-focused and neoliberal, for a start. The EU’s Common Agricultural Policy needs reforming and the Transatlantic Trade and Investment Partnership agreement with the US, which will empower unelected corporations at the expense of elected governments, needs rewriting. But you don’t win a fight by leaving the ring. You get in, stay in and keep fighting your corner.

Hannan Fodder: This week, Daniel Hannan gets his excuses in early

Since Daniel Hannan, a formerly obscure MEP, has emerged as the anointed intellectual of the Brexit elite, The Staggers is charting his ascendancy...

When I started this column, there were some nay-sayers talking Britain down by doubting that I was seriously going to write about Daniel Hannan every week. Surely no one could be that obsessed with the activities of one obscure MEP? And surely no politician could say enough ludicrous things to be worthy of such an obsession?

They were wrong, on both counts. Daniel and I are as one on this: Leave and Remain, working hand in glove to deliver on our shared national mission. There’s a lesson there for my fellow Remoaners, I’m sure.

Anyway. It’s week three, and just as I was worrying what I might write this week, Dan has ridden to the rescue by writing not one but two columns making the same argument – using, indeed, many of the exact same phrases (“not a club, but a protection racket”). Like all the most effective political campaigns, Dan has a message of the week.

First up, on Monday, there was this headline, in the conservative American journal, the Washington Examiner:

“We will get a good deal – because rational self-interest will overcome the Eurocrats’ fury”

The message of the two columns is straightforward: cooler heads will prevail. Britain wants an amicable separation. The EU needs Britain’s military strength and budget contributions, and both sides want to keep the single market intact.

The Con Home piece makes the further argument that it’s only the Eurocrats who want to be hardline about this. National governments – who have to answer to actual electorates – will be more willing to negotiate.

And so, for all the bluster now, Theresa May and Donald Tusk will be skipping through a meadow, arm in arm, before the year is out.

Before we go any further, I have a confession: I found myself nodding along with some of this. Yes, of course it’s in nobody’s interests to create unnecessary enmity between Britain and the continent. Of course no one will want to crash the economy. Of course.

I’ve been told by friends on the centre-right that Hannan has a compelling, faintly hypnotic quality when he speaks and, in retrospect, this brief moment of finding myself half-agreeing with him scares the living shit out of me. So from this point on, I’d like everyone to keep an eye on me in case I start going weird, and to give me a sharp whack round the back of the head if you ever catch me starting a tweet with the word, “Friends-”.

Anyway. Shortly after reading things, reality began to dawn for me in a way it apparently hasn’t for Daniel Hannan, and I began cataloguing the ways in which his argument is stupid.

Problem number one: Remarkably for a man who’s been in the European Parliament for nearly two decades, he’s misunderstood the EU. He notes that “deeper integration can be more like a religious dogma than a political creed”, but entirely misses the reason for this. For many Europeans, especially those from countries which didn’t have as much fun in the Second World War as Britain did, the EU, for all its myriad flaws, is something to which they feel an emotional attachment: not their country, but not something entirely separate from it either.

Consequently, it’s neither a club, nor a “protection racket”: it’s more akin to a family. A rational and sensible Brexit will be difficult for the exact same reasons that so few divorcing couples rationally agree not to bother wasting money on lawyers: because the very act of leaving feels like a betrayal.

Problem number two: even if everyone was to negotiate purely in terms of rational interest, our interests are not the same. The over-riding goal of German policy for decades has been to hold the EU together, even if that creates other problems. (Exhibit A: Greece.) So there’s at least a chance that the German leadership will genuinely see deterring more departures as more important than mutual prosperity or a good relationship with Britain.

And France, whose presidential candidates are lining up to give Britain a kicking, is mysteriously not mentioned anywhere in either of Daniel’s columns, presumably because doing so would undermine his argument.

So – the list of priorities Hannan describes may look rational from a British perspective. Unfortunately, though, the people on the other side of the negotiating table won’t have a British perspective.

Problem number three is this line from the Con Home piece:

“Might it truly be more interested in deterring states from leaving than in promoting the welfare of its peoples? If so, there surely can be no further doubt that we were right to opt out.”

I could go on, about how there’s no reason to think that Daniel’s relatively gentle vision of Brexit is shared by Nigel Farage, UKIP, or a significant number of those who voted Leave. Or about the polls which show that, far from the EU’s response to the referendum pushing more European nations towards the door, support for the union has actually spiked since the referendum – that Britain has become not a beacon of hope but a cautionary tale.

But I’m running out of words, and there’ll be other chances to explore such things. So instead I’m going to end on this:

Hannan’s argument – that only an irrational Europe would not deliver a good Brexit – is remarkably, parodically self-serving. It allows him to believe that, if Brexit goes horribly wrong, well, it must all be the fault of those inflexible Eurocrats, mustn’t it? It can’t possibly be because Brexit was a bad idea in the first place, or because liberal Leavers used nasty, populist ones to achieve their goals.

Read today, there are elements of Hannan’s columns that are compelling, even persuasive. From the perspective of 2020, I fear, they might simply read like one long explanation of why nothing that has happened since will have been his fault.

Jonn Elledge is the editor of the New Statesman's sister site CityMetric. He is on Twitter, far too much, as @JonnElledge.